Capital, the key missing link in so many solar rooftop plans, is finally coming to solar too. In another move to fill the vast gap that exists between potential, demand, and actual supply, SME focused finance start up U Grow Capital has joined hands with Sunvest Capital to provide co lending for solar rooftop and other solar projects.
The idea is to support SMEs in saving electricity cost, and contribute to the struggle against climate change by reducing their own carbon intensity.
U GRO Capital (formerly Chokhani Securities) is a BSE listed, technology enabled small business lending platform which has raised funding from a cluth of private equity and other financial investors in recent years for its SME lending platform to provide sector specific solutions.
Leveraging the expertise and market intelligence of Sunvest, a ‘solar focused NBFC’ and the tech-driven knowledge of U GRO in SME lending, the co-lending programme with an initial corpus of Rs.20 crore will presumably focus on Maharashtra first, where both the firms are based.
It’s an intresting move, that seeks to fill a much needed requirement for MSME’s, many of whom would gladly go for a solar option if they had the financing for it, now that solar cost is more than competitive with the grid costs most MSME’s have to live with. Even captive power costs (mainly through Diesel gensets) are very high for this sector.
“We are delighted to join hands with Sunvest Capital. The co-lending programme will combine our knowledge-driven approach (sectoral focus) backed by technology with in-depth solar panel market insights of Sunvest Capital. We look forward to a long-term mutually beneficial relationship with Sunvest Capital to fill this market gap and join the nation-building through carbon mitigation and clean energy promotion,” said Mr. Shachindra Nath, Executive Chairman, U GRO Capital.
U GRO claims to have developed proprietary tools which comprise of customized SME sector specific statistical scorecards, underwriting insights based on deep sub-sector level research put together in a highly integrated technology platform. This helps in getting an in-principle decision for the loan application within 60 minutes. The Company says it has already disbursed more than US$100mn across 6000+ small businesses in a short span of 10 months. Through the co-lending programme with Sunvest Capital, U GRO Capital aims to create a deeper social impact by facilitating solar panel finance to SMEs so that can reduce electricity overheads.
“We are excited to partner with U GRO capital in this co-lending arrangement. Sunvest has a deep understanding of the rooftop solar market in India and U GRO has unparalleled expertise in SME lending. With over 400 industrial clusters, MSMEs are the growth engine for India’s industrial development and adopting solar energy has numerous economic, social and environmental benefits. Power costs are a big portion of MSME’s overall expenditure and access to the right financial products will now help these businesses to go solar,” said Mr. Sishir Garemella, Founder & CEO, Sunvest Capital. The firm had previously won the US India Clean Energy Finance grant in 2018.
At Rs 20 crores, the amount involved might loo very small, but depending on how it is leveraged and margin contributions, even this could help finance close to 8-10 MW of rooftop solar, at the end of the day. If indeed focused exclusively on rooftop solar, that’s not a bad start, to learn, and demonstrate the viability of the opportunity. With the steep drop in solar rates, as we have reported earlier too, there really was never a better time for opting to go solar, with discom resistance the biggest stumbling block in most cases. Besides the initial set up cost of course.
MSME’s and SME’s, which rarely have the luxury of considering an opex model, due to their constrained finances and lack of a robust credit ratings environment, will welcome every move to help them go solar.